Suppliers downplay Texas electric pilot delay

Retail electric providers in Texas planning to participate in the electricity choice pilot program downplayed the impact of the delay, but customers who signed up expecting to begin service June 1 may not receive power from new suppliers until July at the earliest.


By Ann de Rouffignac
OGJ Online

HOUSTON, May 18 -- Retail electric providers in Texas planning to participate in the electricity choice pilot program downplayed the impact of the delay, but customers who signed up expecting service June 1 may not receive power from new suppliers until July at the earliest.

The Electric Reliability Council of Texas (ERCOT) board of directors said Wednesday the pilot won't be fully functional until sometime in July. It was originally scheduled to begin June 1.

The complications associated with combining operations of 10 separate control areas into one and setting up electronic communications among generation suppliers, scheduling coordinators, transmission owners, retail electric providers, and retail customers created the delay.

Sources close to ERCOT said it might be after July before all systems check out. This was no surprise to many of the retail providers who were already anticipating delays. Most of them told OGJ Online they expected a few glitches and now is the time to iron those out. That's the purpose of a pilot, they noted.

Many said they began to suspect in early April the program wouldn't get off the ground as scheduled and held off ordering power to serve customers. "I never thought power would flow in June," said Gillan Taddune, vice-president and general manager for Green Mountain Energy Co., Austin. "We had modeled conservatively and we are adequately covered in July."

Tom Noel, CEO of ERCOT, said he understood that most of the retail suppliers had not contracted for power. "They told us they need 30 days notice to put contracts in place," said Noel. One retailer who serves commercial and industrial customers said the company has not signed any firm contracts for power.

"We knew this was coming down," the retailer said. "At best, this will start later in the summer. I heard they are 2 months behind." One large marketer with contracts wasn't too perturbed it would have to sell them back into the wholesale market.

Noel said ERCOT would not inform customers of the delay. He said it is the responsibility of scheduling coordinators to inform the retailers. And it will be up to the retailers to inform their customers.

Friday, the Texas Public Utility Commission website was still promoting a June 1 start date for the retail choice pilot. Customers enrolled in the "Texas Electric Choice Pilot Program will begin receiving service in June 2001 from the Retail Electric Provider (REP) of their choice," according to the website.

One source close to ERCOT predicted the switching process will go much slower than previously anticipated, resulting in significant delays in serving larger customers. "ERCOT will initiate the switching in small volumes," he said. "What I understood that to mean is two customers per trading partner per day. That means about 68 switches a day."

He said the rate would ramp up in July when residential customers are switched to new service.

Contact annd@ogjonline.com

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